Just How Much PM-Positive News Can Emerge? You Ain’t Seen Nothing Yet!

Usually, I tackle big picture – often abstract – issues in my writing. And we know, there are plenty to report on. However, sometimes the mosaic created by reporting on the myriad “small stuff” is just as effective in conveying my point; i.e., the entire GLOBAL economy is on the brink of irreversible decline due to the damage created by four decades of unfettered MONEY PRINTING. The world’s BIG MONEY knows it; Eric Sprott knows it – and is visibly ticked offdiscussing it. Generally speaking, anyone that can think for themselves – and is willing to do so – knows it; and pretty soon, the ENTIRE WORLD will as well. Sadly, by the time the masses overcome the “groupthink”that prevents them from acting on such information, it will be too late.

Each day, the “evil Troika” of Washington, Wall Street, and the MSM tell us a new “hurdle” must be cleared to reach the promised land of “recovery.” Regarding anything economic, the outcome is ALWAYS assumed to be positive – despite years of evidence to the contrary. Conversely, they’ll tell you such hurdles are insurmountable for Precious Metals – despite a 12+ year bull market, and textbook conditions for further price appreciation. Over time, relentless misinformation wears one down as much mentally as financially; as holding gold is contrary to a lifetime of PROPAGANDA denigrating it as a “barbarous relic” – despite it having outperformed ALL mainstream assets for the past decade.

First and foremost, we are told gold and silver – despite having already been taken well belowtheir respective costs of production – should fear “tapering” of the most aggressive MONEY PRINTING experiment of all time; i.e., the Ponzi scheme unfolding before our eyes in Treasury and Mortgage-Backed Securities – as I wrote of yesterday. Of course, tapering and halting are two different things entirely; and even if the Fed were to halt QE, it wouldn’t have the slightest impact on the government’s CATASTROPHIC financial condition. In fact, it would only make things worse; as if just the hint of tapering caused such damage to the bond market, think of what the impact of actually halting QE – let alone, unwinding the Fed’s $3.4 trillion bond portfolio – would be. What’s left of the economy would implode; deficits would soar; and the dollar would collapse.

To wit, below is a table depicting what the government itself claims are “improved deficits”; ignoring, of course, what I wrote yesterday of the “extraordinary measures” utilized to conjure them out of thin air. Does this look like an improvement to you; particularly when higher “revenues” are due to pure accounting chicanery – like collecting “dividends” from the insolvent, off-balance sheet housing entities Fannie Mae and Freddie Mac? And what would this chart look like if the Fed stopped buying bonds entirely, causing interest rates to rise? Not only would said “dividends” from Fannie and Freddie create monstrous financial vacuums, but deficits would explode because each 1% rate increase adds roughly $200 BILLION to annual debt service costs. And as NO ONE is buying Treasuries but the Fed, how fast do you imagine said rates will rise?

Then, of course, you have the preface behind the Fed’s June 19th statement; you know, when it said it may moderate the pace of purchases later in 2013 if the economy improves. Well I don’t know about you, but I’m a bit puzzled as to how ANYONE can say the economy is improving; certainly not since June, when rates have surged and everything from durable goods orders to retail sales to mortgage applications, housing starts, and consumer confidence have tumbled. Not to mention, the July and August NFP employment reports were utter disasters – in the latter case, featuring a 30+ year low in the Labor Participation Rate.

There’s a reason the majority of Fed governors say tapering is not even a consideration; as each day, the economic data tanks further. This week alone, we’ve seen an “unexpected” PMI Manufacturing decline, a plungingRichmond Manufacturing Index, a four-month low in consumer confidence, terminally weak durable goods orders, and yet another Wall Street vultureexiting the materially declining housing market. Not to mention, surging Treasury bonds – indicating heightened confidence that tapering is off the table; as the benchmark 10-year yield is down from 2.90% when the FOMC statement was issued last week – covert “turboQEing” efforts not withstanding – to just 2.64% today.

We’re also told to ignore the fact that House Republicans are threatening to SHUT DOWN the government when the next fiscal year commences on Tuesday. Either way, this will be the fifth straight year the world’s largest economy has no budget; and accounting shenanigans or not, a gaping budget deficit that promises to worsen over time – especially if rates cannot be held near their all-time lows. If Congress fails to agree on a new Omnibus spending bill this week; particularly if the already passed – and Republican approved – Obamacare is cited as the stumbling block, we may well see S&P turn tail again, and revise America’s financial “outlook” to NEGATIVE. Not to mention, debt-ceiling “D-Day” has now been set at October 17th; which ironically, could make the budget discussion moot. In other words, a 2011-like CATASTROPHE could be awaiting us in the very near future; and if the debt ceiling is eliminated, 2013’s epic Precious Metals suppression could come to an abrupt end.

Meanwhile, we’re told an easing “Syria crisis” was a big reason gold and silver prices declined, when in fact 90% of their recent gains were made before the alleged August 19th chemical attack – which to this day, no one has any concrete evidence regarding the perpetrators. A supposedly “historic” agreement last weekwith the Russians has already been all but nullified; and frankly, America’s actions depict a nation HELL-BENT on invasion. Heck, if you listened to Obama’s U.N. speech yesterday, you’d think he was Israel’s Benjamin Netanyahu – that is, “champing at the bit”to bomb IRAN.

The ENTIRE GLOBAL ECONOMY is collapsing; and no matter how much governments LIE about it – from China to Greece – their actionsspeak louder than their words. Simultaneously, the level of “fascist fraud” is rising exponentially – as “TBTF” banks like JP Morgan run roughshod over what was once a world-renowned regulatory landscape. Even Central banks are on to the PM suppression ruse; including two that joined the “repatriation parade” this month – Poland and Finland. And thus, as we watch the “DEATH THROES OF A DYING CARTEL” – including this week’s three straight2:15 AM EST attacks at EXACTLY the ROUND NUMBER of $1,330/oz (all of which have been repelled); keep in mind the amount of PM-positive news is just getting started…

Reality ALWAYS wins the day, and this will be no different. Only this time, when it does, the END GAME of the failed four-decade fiat currency regime will have commenced. And when it does, you better have already purchased your PHYSICAL gold and silver; as likely, you won’t get another chance.

And to conclude, here is the first-ever live interview I have seen with the PM crusader Andrew Maguire; fittingly, on the Max Keiser show – as Max, too (like myself) is a former Wall Street insider that fled the criminality to pursue TRUTH and JUSTICE. When Andrew first came onto the scene in early 2010, I was skeptical of his motives. However, after spending a week with him and his wife at GATA’s London conference in August 2011, I changed my mind completely. It is people like him that inspire me to be the best person I can be; and listening to him speak of what I have written of for years – from the standpoint of a long-time LBMA metals trader – is as empowering as anything I could possibly write.

6 Comments

Slvrizgold
on September 26, 2013 at 3:55 pm

Another great piece Mr. Hoffman. I salute you! Wish more people in the PM world had your stones. Too many soft spoken passive “Yes men.”

why is it no one in this space can address where all the physical silver is coming from to keep prices this low? bix weir came through with a very funny story, but no one else will even give it a go.
silver bugs all know now this is the big question and the only issue to set the metal free. all the qe and overseas buying means squat if the powers that control the price via paper shorts can still back up their talk with physical. weve been played by the silver bullion dealers with a sense of urgency for them to make sales. sure has worked for them. there was no shortage at 35 dollars , nor 30 , nor even at 20. anyone?

Production has already started to decline, and will likely go into freefall at the current price levels as they are well below the cost of production.

George NOVY
on September 27, 2013 at 2:06 pm

Greetings Andy!
YOu may be right for some companies that “Production has already started to decline” – let them!- but TAKE A LOOK at the 2nd quarter on the FMajestic site http://www.firstmajestic.com/s/NewsReleases.asp?ReportID=597671&_Type=News-Releases&_Title=First-Majestic-Reports-Second-Quarter-Financial-Results
AND they claim here that the “average realized silver price per ounce was $22.19 a decrease of 23% from last year’s quarter (even though it hovers around the rigged price).
Nevertheless, they did what was expected and decided “suspend a portion of silver sales to await a rebound in prices”. Nonetheless, they (far fewer than other mines) increased production by 44%! And their cash reserves are still there! SO, Not ALL mines are freefalling!

I am not referring to any specific firm, but the industry in general. Moreover, I’m not sure why so many people have such a fascination with First Majestic. Yes, they are a good company – better than most; and yes, they may be the only silver miner with a management team that acknowledges the manipulation and is willing to address it. However, their STOCK – which is the only reason you should care about it – has been destroyed just like the rest; and my issues with miners will only get worse in the coming years.

Will AG be a good stock going forward? I neither know, nor care. But I can GUARANTEE you the majority of global silver miners are on the brink of collapse, and that production will indeed implode in the coming year or two. What will that do to silver prices? And what will it do to mining shares? That is your choice to decide.

Andy

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